A slowdown in global industrial production is becoming evident, as the inventory cycle is drawing to a
close, notably in the United States, and as fiscal support measures in key economies are being withdrawn.

In a recent IMF Staff position note Olivier Blanchard and Gian Maria Milesi-Ferretti provide a useful classification of current account imbalances. They argue that deficits and surpluses on current accounts are "good" if they reflect optimal allocation of capital across time and space. That is the case, for example, when savings ratios differ across countries because of different ageing profiles or when investment ratios differ because of different productivity trends.